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Saving the Blue Jackets

In a plan to keep pro hockey in Columbus and the Arena District teeming with jobs, the city and county would buy Nationwide Arena for $42.5 million, then put up casino revenue to pay for it. For its part, Nationwide would buy a 30 percent stake in the team.

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Using casino tax revenue to finance the $42.5 million public purchase of Nationwide Arena would
save thousands of jobs and keep the Blue Jackets in Columbus, the architects of the proposed deal
said yesterday.

“My motivation is economic development,” said Columbus City Auditor Hugh J. Dorrian. “We’re not
talking about a few jobs; we’re talking about thousands of jobs.”

Dorrian, Columbus lawyer John Rosenberger and Bill Jennison, executive director of the Franklin
County Convention Facilities Authority, rolled out a plan yesterday that has been two years in the
making.

It would move the arena from an ownership group led by Nationwide and into the hands of the
facilities authority. Nationwide would invest more than $52 million in the Blue Jackets, becoming a
30 percent owner of the team, and buy naming rights to the arena. The hockey team would agree to
remain in Columbus through 2039.

It’s a complicated deal with a lot of players.

But it would avert the threat that the Blue Jackets would leave town, Rosenberger said, and
maintain the economic health of the Arena District, where more than 10,000 people work.

The deal also would place in public hands an arena that voters declined to fund with higher
taxes in 1997. Instead, Nationwide and The Dispatch Printing Company financed the arena, which
opened in 2000. Dispatch Printing, which publishes
The Dispatch, is a minority owner of both the arena and the hockey team.

Dorrian pointed out yesterday that voters had turned down arena taxes five times in the past 30
years. But, he said, “there’s a fundamental difference between those attempts and this attempt:
Those called for an increase in taxes.”

In this deal, Franklin County and Columbus would pledge up to a third of the tax revenue they
are due from the state’s four casinos through 2039 to finance the $42.5 million purchase of the
arena from Nationwide Realty Investors and to pay to operate it.

Nationwide would invest $52 million in the Blue Jackets and would take a 30 percent ownership
interest in the team. It would pay the team $28.5 million over 10 years for naming rights to the
arena.

The Blue Jackets have said they are losing $10 million to $12 million per year on their lease
deal with Nationwide. Rosenberger’s panel had begun pursuing a public purchase of the arena so the
lease could be changed after Blue Jackets majority owner John P. McConnell said he’d consider
moving the team if the lease deal is not reworked.

The deal is expected to save the team $9.5 million a year.

Blue Jackets President Mike Priest issued a statement yesterday praising the proposal: “This
report offers a solution that will provide a long-term sustainable business model for the
organization. We are encouraged by the report’s findings.”

Mayor Michael B. Coleman would not comment yesterday. Dan Williamson, his spokesman, said the
proposed deal appears to meet the mayor’s criteria for keeping the Blue Jackets in Columbus without
using money from the city’s operating fund.

The deal would need the approval of the Columbus City Council, the Franklin County commissioners
and the Convention Facilities Authority’s 11-member board. Rosenberger said he, Dorrian and
Jennison had met individually with members of all three groups and that he’s optimistic.

John Ivanic, spokesman for the City Council, said members would not comment yesterday. He said
it could be two to three weeks before they vote on the deal.

Franklin County Commissioner John O’Grady said he has “always been willing to be involved with
deals that are about job creation and retention.”

He also said, “I’m confident of its chances at the county courthouse.”

Commissioner Marilyn Brown called the deal “an economic-development investment in that district
for us.” But she said she needs to see the details before voting.

The $42.5 million purchase price for the arena is slightly lower than the $44 million value
Nationwide placed on it during court proceedings to set the taxable value of the building in 2006,
a case in which it was in the company’s interest to set the price as low as possible. The county
auditor had valued the arena at $129.7 million. It cost $147.1 million to build in 1999, Nationwide
said.

Now, Nationwide would loan the facilities authority $43.3 million for the arena purchase at
4.875 percent interest for 27 years. Nationwide also would agree to take its payments as casino
money comes in. If more money than expected comes in, the loan would be paid off faster. If less,
the loan would be extended.

The state of Ohio would help with the purchase through a 1 percent, $10 million loan, half of
which could be forgiven by the state if the Blue Jackets meet payroll goals. The facilities
authority needs a total of $53.3 million in 2012 to pay the purchase price, operate the arena and
take care of other contingencies, Jennison said.

Rosenberger and others estimate that Franklin County will take in about $12 million per year in
casino tax revenue and Columbus $18 million. That’s less than earlier estimates. Under the deal,
each would pledge a quarter of its casino revenue to retire the debt and operate the arena starting
in 2013. After three years, the percentage would rise by 1 percent each year for seven years and
top out at 32 percent in 2022.

Nationwide also would continue payments to Columbus schools of $1 million per year into 2015,
Rosenberger said. The company agreed to make the payments to make up for a tax abatement on the
arena property. But when that agreement ends in 2015, with the arena owned by a public agency,
those payments would end and the schools would receive almost nothing, Jennison said. The arena
currently pays no property taxes to other agencies because of the abatement.

Columbus’ casino is under construction near I-270 and W. Broad Street, and developer Penn
National Gaming plans to open it in late 2012. Penn National had planned to build the casino in the
Arena District, but business and government leaders, including Coleman and executives at Nationwide
and Dispatch Printing, pursued a successful ballot issue last year to move the casino to Franklin
Township. The casino is to be annexed into Columbus.